Systematic observations I wish I made when I was a rookie | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Systematic trading 1,576 replies

Simple Systematic Double RSI/Fisher system- 1h-D Time Frames 166 replies

Anyone use Systematic from Alpari? 1 reply

A Systematic Approach to Markets 68 replies

Systematic Trading vs. Discretionary Trading 14 replies

Attachments: Systematic observations I wish I made when I was a rookie
Exit Attachments

Systematic observations I wish I made when I was a rookie

  • Poll

  • Has this thread helped you in any way?
  •  
  •  
  •  
  •  
  •  
  • #1
  • First Post: Edited Aug 8, 2014 2:31am Aug 7, 2014 3:56am | Edited Aug 8, 2014 2:31am
Updated!

Hello.

I will get right to it.

1. Choose a timeframe on E/U price. M5 for Daytrading, M15 for 2-3 day trades, H1 for about a two week trades on average. For M5, you should have enough data for at leat 24 hours back. For M15 you got 2-3 days, for H1 you got 2 weeks or so. If you cant fit it into your screen, get one more screen. You are supposed to be able to see the candlesticks clearly and you should of course learn how to read high/low and exit/entry of candles. If you cant afford the screen you cant afford to trade right now. If you want to demo anyway, zoom out on the chart.

2. Open up a demo account. Put 50.000 euros or so in it.

3. Choosing a direction from your chart: If now (right side) on the chart is lower then the beginning of the chart, then direction is down or sell. If now on the chart is higher then in the beginning of the chart, then direction is up or buy.

4. You buy/sell in the direction you have established in the previous step. If you are going to sell, sell when a buy move looks to become weaker. If you are going to buy, buy when a sell move looks to become weaker. Use 0.05 lot for M5. Use 0.1 Lot for M15. Use 0.2 Lot for H1. Wait at least 3 candles before you enter the next position.

5. A good take profit for M5 is 3-18 pips. A good take profit for M15 is 8-22 pips. A good take profit for H1 is 8-35 pips.

6. When all positions total out and makes profit, you wait for just a bit of profit on your best positions as in the take profit examples above, the best TPs can be doubled or trippled in a big move. The thinking goes that you dont know in advance if there is going to be a big move or a small one. Either way you try to follow the move with the orders, always in the right direction. If you have 1 position in profit and 1 in BE, you close both. If you have 1 position in drawdown, 1 position in BE and 1 in profit you close the one in profit and the one in BE and you let the one i drawdown chill out for a while. If you have multiple positions in drawdown, be cool! You got time on your side. Set your TPs, enter when there is opurtunity. The lot size you have are MINISCULE. If you are in 5% drawdown, thats NOTHING. If i starts to enter BE, be ready and close losses and wins to reduce drawdown. Normal traders are often at 30% drawdown. This is how you make an immense wealth. It takes years and years. If i knew any other way and you deserved to know, i would tell you.

7. Get rid of your fear of money. If you have fear of money you wont ever have much of it.

8. If after 20 Cycles (20 days in case of M5, 3 months in case of M15, one year in case of H1) you see your drawdown have not been above 20%, increase lot size SLOWLY. Increase 25% per 20 cycles. Until you have something like 15% drawdown when you are really in the shitter.

9. There is quite a big probability you will become controlled by emotion, and then maybe you will blow your account. Thats why you demo.

10. Your timeframe gives you the idea of how long its going to take to see if you are good enough right now. Every 20 cycles you go through all your trades. After 40-120 cycles something like that, if you still have your account, you might be ready for real money. If you blew your account either you emotionaly got out of hand or you enden up on the wrong side of a crash (your crash).

11. Time does not exist as divided into separate units. Time is a constant flow. This means that "Timeframes" exist only in peoples minds. Therefore a closed candle on on side of S/R or some such, is not that important. To a beginner a H1 chart looks the same as a M1 chart. As long as a person is a beginner in trading, this will seem so. To see some sort of difference between a H1 chart and an M1 chart, that is the beginning of experience.

Attached Image (click to enlarge)
Click to Enlarge Name: Range and dip.jpg Size: 137 KB


Attached Image (click to enlarge)
Click to Enlarge Name: Trend trading.jpg Size: 122 KB


Remember: Trading is not for everyone. It takes a long time to learn, and some just never get it, some do. And if it dont work out, dont blame me, you are the one who wanted to trade.
My signature is: "Classified".
  • #2
  • Aug 7, 2014 4:06am Aug 7, 2014 4:06am
You got a point, but you will get hammerd by the "gurus".
I don't even have a cool signature
  • #3
  • Aug 7, 2014 4:43am Aug 7, 2014 4:43am
Quoting NoCoolNick
You got a point, but you will get hammerd by the "gurus".
No. They cannot hammer me. Im not there when the hammer falls. I have no ego. I left it in 2009. I am done here in that regard. I dont need to say anything more. I wont oppose any other persons ideas about me, about the world or about how to trade. Those are futile things to oppose.

It was nice talking to you yesterday. You are a humble person. I think you will achieve a lot of that which you do not yet seek.

The "gurus" will expose themselves by what they say, so that who and what they really are will emerge. They are afraid of this, and they know it.
My signature is: "Classified".
  • #4
  • Aug 7, 2014 5:01am Aug 7, 2014 5:01am
I wished I knew this when I started too

Must say it is exactly what new ppl need.

My sentiments are the same. Except, I try to manage drawdowns now in a more orderly fashion.

Instead of letting draws run to 30%. I have a daily risk limit, which increases if I am profitable for that month and stays the same if I am losing money.

This is because instead of trying to save one particular trade to the tilt, i rather recover equity on another profitable trade. But of course this is me after practicing for more than a couple years.
  • #5
  • Aug 7, 2014 5:19am Aug 7, 2014 5:19am
Quoting Failtrader
I wished I knew this when I started too Must say it is exactly what new ppl need. My sentiments are the same. Except, I try to manage drawdowns now in a more orderly fashion. Instead of letting draws run to 30%. I have a daily risk limit, which increases if I am profitable for that month and stays the same if I am losing money. This is because instead of trying to save one particular trade to the tilt, i rather recover equity on another profitable trade. But of course this is me after practicing for more than a couple years.
Good, you have come far i think. Happy trading to you my friend!
My signature is: "Classified".
  • #6
  • Aug 7, 2014 8:21am Aug 7, 2014 8:21am
yaed, kindly please clarify more on this "If you are going to sell, sell when a buy move looks to become weaker. If you are going to buy, buy when a sell move looks to become weaker.".


Thanks!
  • #7
  • Aug 7, 2014 9:48am Aug 7, 2014 9:48am
Quoting yaed
Hello. I will get right to it. 1. Choose a timeframe on E/U price. M5 for Daytrading, M15 for 2-3 day trades, H1 for about a two week trades on average. For M5, you should have enough data for at leat 24 hours back. For M15 you got 2-3 days, for H1 you got 2 weeks or so. If you cant fit it into your screen, get one more screen. You are supposed to be able to see the candlesticks clearly and you should of course learn how to read high/low and exit/entry of candles. If you cant afford the screen you cant afford to trade right now. If you want to demo...
thanks for info experienced traders usually prefer to use h4 + tf. Less stress, money will care asbout itself and intraday traders will do all job instead of you
  • #8
  • Aug 7, 2014 10:36am Aug 7, 2014 10:36am
Quoting mario777
yaed, kindly please clarify more on this "If you are going to sell, sell when a buy move looks to become weaker. If you are going to buy, buy when a sell move looks to become weaker.". Thanks!
You dont sell in a sell trend when the move is strong for selling. Instead you wait for a buy move in that sell trend and when it stops, you enter your sell. Thats a retrace. The reverse for buying. Retraces are the only good opurtunity to enter a trade, that i know and this is what i do. Some call it other things, but that doesnt matter. Look at the charts. If its hard to "see" the trend direction, use MA 21, 55, 89, 144 and some more, or something like that. When the MAs fan out and you got some pip distance between them maybe its easier to spot the direction.

Look up Rainbow trading maybe. Maybe guppy trading. Maybe the user FXQ and Linuxtroll. Maybe thats your thing to get your gears into spin.
My signature is: "Classified".
  • #9
  • Edited 10:56am Aug 7, 2014 10:38am | Edited 10:56am
Quoting Naokia980
{quote} thanks for info experienced traders usually prefer to use h4 + tf. Less stress, money will care asbout itself and intraday traders will do all job instead of you
Then do that if you think its the right thing. I dont know how to calculate for longer periods of time, im not at all interested in looking that much at something like H4 since i got my thing going. I dont care what other people do when it comes to trading, im not them, i am me. This is my experiences, not theirs. If you want to talk to them, go talk to them. Here you talk to me and the others here how about that, sound OK to you?

For me H4 is MUCH more stress then daytrading. I cant sleep with open positions. If you like that kind of thing, sure go for it. I would never enter a trade that i thought would last longer then 3 hours. But of course you can trade H4 in this sort of way, a lot of people do.
My signature is: "Classified".
  • #10
  • Edited 3:41am Aug 8, 2014 2:37am | Edited 3:41am
Love and good will

What i am doing here is im just trying to spread the love and good will. Because i have had the benefit of the love and good will of other people here on FF when i was learning to trade. Now that i dont have anything more to learn from this place, im trying to give back of that love and good will that i learned so much from in the beginning. I am not dependent on anyone agreeing, this is simply my thoughts and experiences.
My signature is: "Classified".
  • #11
  • Aug 8, 2014 2:56am Aug 8, 2014 2:56am
The question of "why?"

Every now and then i have encountered the question "Why did price move against me?" or "Why did the price do that?". To me these are questions concerning the fundamentals of some financial instrument price, such as the E/U price. To me, who is a purely technical/mathematical trader, this question is irrelevant. A physics professor asks "why" a falling objects accelaretes as it does, only if she is trying to figure out how gravity really works. That is a very different question then trying to figure out how fast the object will be going when it hits the ground and so be able to calculate with how much force the object will hit the ground. Being a technical trader, to me, means to calculate HOW fast the obect will be going when it hits the ground, and NOT to try to figure out WHY its going that fast.

To figure out WHY price is doing exactly what it is doing is impossible to me because it includes an almost infinte amount of variables that i could never find out. Like:

Why did that bank executive decide to tell the employees to buy in that instant?
Why did J.P. Morgan gather THAT big losses on their balance sheet?
Why did Bush allow all that deregulation?
Why is oil denominated in USD?
How goes the conflict in Ukraine?
What are Putin up to, really, except what he is saying?
Who are Putins friends?
Who gave the most to Obamas campaign?
Who planned and executed 9/11?
Why did the towers collapse in their own footprint all of a sudden?
Who trained Usama Bin Laden?
What contacts in the CIA did the Bin Laden family have?
Who planned the failed U.S. coupé in the beginning of the 30s?
Who owns the most money?
Which people controls the most amount of USD?
Which people control the most amount of Euros?
Why are the Japanese central bank printing money like there is no tommorrow?
Why are the private federal reserve printing money like there is no tommorrow?
Who sets the interest rates?
What is a central bank?
What is USD really?
What is the euro really?
Who controls the ECB?
Who controls the EU?
Who controls the US?
Who controls the UK?

These and many other questions are fundamental to how the world works. These things are fundamental to what happens to the dollar and the euro. I dont have all the answers to these questions and i never will. But they are the fundamental questions of answering "why?". To answer the "Why" is a whole different thing then to actually trade. To me trading is math and pattern recognition. Answering the "why?" is history, sociology, psychology, occult, macro economics, psychoanalysis, physics and every other subject of knowledge known to humanity.
My signature is: "Classified".
  • #12
  • Aug 8, 2014 3:39am Aug 8, 2014 3:39am
Sun-Tzu applied in trading
Ok now im going to freely and philosophicaly use some of Sun-Tzus thoughts as explained in "The art of war". In this adaption, we make war against the price. The price is our enemy. Your assets is your money. "The war" is trading itself.

Act when the enemy is weak.

Refrain from acting when the enemy is strong.

Do not keep your assets visible, but try to act covertly and watch the enemies movements before you act and put your assets in use.

A war is a prolonged chain of events in a long period of time. Every act should be a part of this prolonged act of war.

Its better to take a small safe victory, then to go to a big uncertain battle.

There is no unwinable wars and no lord that cannot be defeated, but there are days when it is best not to go to battle.

Only go into battle if you can clearly see how to win.
My signature is: "Classified".
  • #13
  • Aug 8, 2014 3:50am Aug 8, 2014 3:50am
Quoting yaed
Sun-Tzu applied in trading Ok now im going to freely and philosophicaly use some of Sun-Tzus thoughts as explained in "The art of war". In this adaption, we make war against the price. The price is our enemy. Your assets is your money. "The war" is trading itself. Act when the enemy is weak. Refrain from acting when the enemy is strong. Do not keep your assets visible, but try to act covertly and watch the enemies movements before you act and put your assets in use. A war is a prolonged chain of events in a long period of time. Every act should...

Nice statements
  • #14
  • Aug 8, 2014 4:29am Aug 8, 2014 4:29am
Quoting Failtrader
{quote} Nice statements
I try as best i can.
My signature is: "Classified".
  • #15
  • Aug 8, 2014 8:29am Aug 8, 2014 8:29am
Probability, drawdown and lot size
Nothing in this world is completely known in advance. I think quantum physics is right on track, meaning there is no certainties. This sort of thinking is usefull in trading. The amount of positions and the lot size is how you show the calculated future probability of where price is going to be in a reasonable amount of time. I apply this by using many small positions. When i have a good probabilty to be right i enter. If i dont have a good reason to think so, i dont enter. Sometimes i have 5-6 positions open, all in drawdown. That is no problem as long as they are risk managed, meaning i have a idea of how big a drawdown i can incur before i know my positions is in the shithouse.

Always have a good idea of how much drawdown you can get on average in a bad day of trading. For instance right now on E/U moves about 50 pip up/down each day. On a wild day maybe 85 pip. So if one position is in the shitter for real and you put it almost completely wrong its down -70 that day. If you got 5 positions spread out that day then they will get you down a couple of hundred pips and you need to calculate if you can handle that and then calculate how many positions at what lot size you can get in the shithouse before you call the quits.

But i mean, if you get a position into -70 in one day on E/U, then you REALLY did the wrong thing that day. You should start thinking about what the hell you are doing to your account. If you got one i -70, one in -60, one in -40, and two in -30 on the same day you got -230 in that day. If you do that bad, it should not be much more then a couple of % of your total account. So lets say -230 is 5%, then your accounts contains enough for -4600 pip before you really blew it.

I would think that if you can get yourself down -230 in one day, then you should be able to make that up in about 5-10 days of work. Of course you can multiply these numbers in any way you see fit as long as you use the same multiplier on all of them. Lets say you trade H1 and you can get -500 in a week, then at least you should make +500 in 5-10 weeks. But then your account should be able to have 10.000 pips in them at that lot size that you have chosen.

The account im working on now has about 2500 pips worth of money. Meaning if i get to -2500 pip drawdown i get a margin call and thats it for this time. But i trade short term. I would need about 10.000 pips worth of money to trade H1. Of course my lot size is calculated on the amount of cash in my account and the drawdown i might incur.

But, what is relevant to your trading depends on what instrument you are trading and its volatility at the moment. My risk is calculated in current E/U data and i trade only E/U and have been doing almost exclysively so for many years now.

Of course, price can in a crash move almost infinetely in any direction. Dont forget that. And given that you are not a powerfull mage or J.P. Morgan executive, you dont know exactly when this is going to happen.
My signature is: "Classified".
  • #16
  • Aug 12, 2014 6:27am Aug 12, 2014 6:27am
Pro traders, drawdown and one position trading
It seems as if proffesional traders dont use one position at a time. This is a general rule, it does not apply to ALL of them. Why? Because they all have drawdown, usually of say 10-30% of the total account. They would not have that if they always used on position. If they DID use one position, all the drawdown they would ever have to be in would be the drawdown that the stoploss would take them to. So if theyre leverage would be reasonable they would maybe have a drawdown of 0.1-3% something like that. Riskng 3% in one single position is a lot and i cant really see why anyone proffesional would ever bet more then 3% in one trade.

This leads me to a conclusion: Its almost impossible or near impossible to trade in a one position way and still be a profitable trader. Why otherwise does almost ALL pro traders have a significant drawdown at all? I mean if it was possible to trade one position at a time, there would be no incentive to trade many positions and to take on 10-30% drawdown?

And this leads on: Why then are 95% of all the systems here on FF one position systems? How does that fit into the picture of pro traders almost ALWAYS having a significant historical drawdown? The most simple answer, and one Occam would suggest i think is this: Because those "systems" are not much worth at all. This is at least what the data suggest to me. If anyone can explain this in any other way, i would be happy to hear about it.

I use one position every now and then when i go into profit quickly on that position i close it and thats it. But most of my closed positions are a part of a bigger thing with 1-6 other positions.
My signature is: "Classified".
  • #17
  • Aug 12, 2014 6:51am Aug 12, 2014 6:51am
Quoting yaed
{quote} You dont sell in a sell trend when the move is strong for selling. Instead you wait for a buy move in that sell trend and when it stops, you enter your sell. Thats a retrace. The reverse for buying. Retraces are the only good opurtunity to enter a trade, that i know and this is what i do. Some call it other things, but that doesnt matter. Look at the charts. If its hard to "see" the trend direction, use MA 21, 55, 89, 144 and some more, or something like that. When the MAs fan out and you got some pip distance between them maybe its easier...
kindly please show us some examples on chart. Many Thanks!
  • #18
  • Aug 12, 2014 8:56am Aug 12, 2014 8:56am
Quoting mario777
{quote} kindly please show us some examples on chart. Many Thanks!
You know what? I will let you define what chart on E/U price to do this.

Attached File(s)
File Type: tpl Fibonacci EMA template.tpl   2 KB | 482 downloads


Use the template on any TF on E/U price, where ever you want. Take a screenshot on it and i will use that picture to define what i mean. I do this, because i dont want to choose the perfect place to show you this, thats why its better if you choose when and where to use it and i will show you how this works. Sound good to you?

If anybody else wants to do the same thing, go ahead and i will show what i mean.
My signature is: "Classified".
  • #19
  • Aug 13, 2014 12:50am Aug 13, 2014 12:50am
You're still a rookie. If you weren't you would know that trading small tf's on a demo account and a real account with most brokers makes a huge difference.
  • #20
  • Aug 13, 2014 1:36am Aug 13, 2014 1:36am
Quoting MedievalEcon
You're still a rookie. If you weren't you would know that trading small tf's on a demo account and a real account with most brokers makes a huge difference.
Good morning!
Your opinion is noted and filed under the category "Unknown person says things to boost her/his own ego illusion." This category is every growing with quotes of likewise value (x).
My signature is: "Classified".
0 traders viewing now